Report calls for better oversight of oil and gas production

Current regulations are inadequate for monitoring and controlling oil and gas development, according to a new report from a coalition of western resource councils. In particular, the report focuses on the potential problems surrounding treatment and disposal of produced water, the contaminated water that's pulled up along with oil in the drilling process.

Produced water is exempt from federal regulation, and Powder River Basin Resource Council spokesman Bob LeResche says that leaves the door open for all kinds of problems -- from saltwater contaminating aquifers to improper radioactive waste disposal.

“There need to be standards," LeResche says. "Given the national gridlock, they need to be state standards. And states so far, none of our states have really met the need to establish good standard practices for oil and gas production and transportation.”

The report also highlights areas where there aren't sufficient penalties, noting that while there are hundreds of spills and blowouts every year in western states, companies are rarely fined for them. Wyoming had 204 spills in 2012, but levied just 10 fines. LeResche says it’s a problem that the state doesn’t have prescribed, or mandatory, penalties for well accidents.

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Cole Anderson is in charge of Wyoming’s air quality permitting process. He says the DEQ has reviewed the company’s proposed emissions, and found them to meet state standards.

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When there isn’t pipeline or processing infrastructure available to move the natural gas, companies simply burn it. The draft bill would have required severance tax payments on gas flared more than 180 days after the well starts producing. Representative Michael Madden, one of two supporters of the bill, said the proposal wasn’t a tax increase, but rather the repeal of an exemption.